The crypto market is facing struggles for the last seven months. In May, the total market cap of the digital currency fell by 28%. The World’s original and the largest cryptocurrency BTC alone has lost 37% of its value and is currently trading at $30,180. Accounting for all the losses Bitcoin is 56% down from its all-time high of $68,790.
The world’s second largest cryptocurrency, Ethereum, is facing even more dire situations than Bitcoin is going through. ETH against BTC fell 52% in 2022 with a 63% loss hitting its all-time high of $4,892 on November 16, 2022. while the other cryptocurrency also saw similar, if not worse, losses. during the year.
Strategists’ view on Crypto downtrend
Kara Murphy, CIO of Kestra Holdings’ opinion on the crypto downtrend explains:
“It feels very much to me like crypto is also subject to a lot of the monetary cycle that’s been hitting the more traditional asset classes. Looking at the rapid increase in crypto prices, it seems clear that they really benefited from easy-money policies, and now that the money is coming out of the system, that’s a good part of the reason why crypto is declining more recently.”
Meanwhile, digital asset broker Bequant claims that only 51% of BTC addresses are in the green today because they bought their BTC at a higher price than their current selling price. As Securitize Capital Managing Director Wilfred Daye said:
“There may be capitulation because larger institutional players, guys who got in during the current cycle, they’re at risk of selling their assets and liquidating their assets. This particular cycle that started late 202, you had a lot of institutional folks getting in at a higher price, so I think it’s more institutional capitulation.”
BTC miners are currently facing rising and falling price pressure and moved $6.3 billion worth of Bitcoin to exchanges in May.
In the fast-moving volatile crypto world of digital assets, the factors affecting may turn the sentiment around at any moment.
On top of that, kara says that investors who bought Bitcoin at a price of $10,200 no later than November 2020 are now on the profitable side of the market. While the same is not true for someone who bought BTC in January 2021 or beyond, he specifies.
